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NEW YORK (CNNMoney.com) -- You will often hear people, especially car writers, say that one car is "based on" another or that two vehicles "share a platform." For example, they might say that the Ford Fusion is based on the Mazda6 or that the Toyota Highlander is based on the Toyota Camry.

What isn't clear is just what that statement means. By itself, it tells you a little, but very little, about what a car is probably like.

Most people assume that one car is simply a "badge engineered" version of the other. That means that the differences between the two vehicles are almost entirely cosmetic.

For example, the Mercury Milan is a "badge engineered" version of the Ford Fusion. Park the two cars side by side and you'll see right away that they are, for all practical purposes, the same car with different paint jobs, grilles and lights. The Milan is a Fusion dressed in slick European-looking duds and with a few added features.

But the Ford Fusion, itself, is based on the "platform" of another vehicle, the Mazda6 sedan. (Ford owns a controlling interest in Mazda.) If you park a Fusion and a Mazda6 next to each other, though, there would be nothing to indicate that these cars are related. They aren't even the same size. The Ford is slightly larger than the Mazda.

If you were to drive the two, they don't seem terribly similar, either. The Ford has a smoother ride and feels nice, but it's a little less responsive than the quick-feeling Mazda6.

So you might wonder how these two vehicles are related. What they share is all stuff you can't see. Some of it's important - like a V-6 engine - but most of the shared parts you probably couldn't care less about. (Even though some of it - like electronics and wiring - is actually very important.)

The core

Because vehicles are spoken of as being built "on" a certain platform, there's a tendency to think of the platform as, literally, the vehicle's floorpan, the bottom of its body structure.

But, really, that's getting things a bit turned around. There are other things that must be decided first. The rest of the vehicle is engineered around those basic decisions.

When product planners and engineers talk about a "platform" or "architecture," they're generally talking about a basic type of vehicle that can be made from a few combinations of suspension, engine and transmission choices.

For starters a company might have an "architecture" for small front-wheel drive cars, another for larger front-wheel-drive cars, another for rear-wheel-drive cars and another for trucks and truck-based SUVs.

While all this might all sound terribly confining, limiting the number of basic "platforms" and sharing parts, combined with more versatile modern factories, actually allows auto manufacturers to offer more different models today than ever.

In years past, a car model was considered successful only if it sold in the hundreds of thousands. Today, cars can be profitable when fewer than a hundred thousand are sold.

That's because modern car factories are flexible enough to make several different models at the same time, assuming there are enough similarities in their basic construction. They don't have to be identical.

"The consumer is getting a little more discerning and wants a more customized solution," said Michael Robinet, vice president for global vehicle forecasting at CSM Automotive.

The key is creating platforms with enough "bandwidth," said Jon Lauckner, General Motors' vice president for global program management. Each fundamental platform has to be engineered, from the very beginning, to be flexible enough to build different, distinct vehicles.

For example, DaimlerChrysler can build the Chrysler 300, Dodge Charger and Dodge Magnum in one factory and will soon add the two-door Dodge Challenger to that.

Parts to make the vehicles can be purchased in larger numbers, which decreases costs, as well. And vehicle development costs are far less when designers and engineers don't have to start from the ground up with each new model.

"The [manufacturer] that understands this is going to do well," said Robinet.

The problems comes when vehicles are too similar, so that consumers feel they could just as well buy one as the other. Then all the carmaker is succeeded in creating more competition for itself

The secret lies in using engineeing and design to create different personalities. Relatively minor changes can often be enough. For example, the Mercury Milan is worth a few thousand extra to those who just want a more fashionable car than the Ford Fusion.

Even without changing any working parts, though, engineers can change the deeper character of an automobile.

"You can share many major mechanical components but give yourself a lot of flexibility in the tunable components," said Paul Mascarenas, Ford Motor Co.'s vice president of product development for the Americas.

"Tunable components" are things like steering and suspension can be made to behave slightly different without using different parts.

For example, GM's redesigned Chevrolet Malibu, to be introduced soon at the Detroit Auto Show, is identical to the Saturn Aura under its skin.

But the Malibu will look nothing like the Aura and, just as important, it won't drive like the Aura. While the Saturn is tuned for drivers who prefer responsive European cars the Chevy will be tuned more for those who like American-style cruising.

So, by creating uniformity a car company can, ultimately, create greater variety for consumers. If they do it right.